In Preparing Consolidation Working Papers,why Is It Necessary to Eliminate

question 8

Multiple Choice

In preparing consolidation working papers,why is it necessary to eliminate intercompany profits?

• A)To nullify the effect of intercompany transactions on consolidated financial statements
• B)To defer intercompany profits until the following year
• C)To allocate unrealized profits until the following year
• D)To reduce consolidated income

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